The
U.S. Fed’s announcement in October that it was ending quantitative
easing capped a tough month for precious metal producers. The news led
triggered another wave of selling in gold dropping under $1,200 and
silver falling even more aggressively to under $16. The fall only
compounds challenges for producers whose third quarter results already
show stress from the metal prices.
A
technical perspective shows the breach of $1,180 area, a key support
level, creating more problems for gold. Unless the price can recover
back and hold above, the next downside target should take the price to
the $1,088 Fibonacci support area.
The
renewed wave of fear has hit gold-silver stocks very hard with 2008
lows now being re-tested. If the gold-silver prices can find a bottom
soon, and it could have very well put it has in this past week, then I
expect that these stock prices will reverse dramatically. But until the
fear of much lower gold and silver prices subsides, negative pressures
will dominate and volatility will be at historic levels.
SEABRIDGE GOLD
continues to expand its KSM deposit, with new drill results expanding
the potential of the Iron Cap Lower Zone including an impressive 593
metre-intercept grading 1.14 g/t gold and 0.37% copper. The
company has traced the zone for 750 metres and it is still open to the
north and at depth. With so many results coming in Seabridge expects to
have a first resource estimate out on the new zone in the first quarter
of 2015. (more)
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